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WIKI ANALYSIS
Wynn Resorts, Limited (NASDAQ: WYNN) develops and operates luxury casino resorts. The company serves Las Vegas, Nevada and Macau, China. In Las Vegas, the company owns the Wynn Las Vegas and Wynn Las Vegas Encore properties while in Macau, the company owns Wynn Macau and Wynn Macau Encore.[1] All of these properties are marketed as luxury resorts[2] and, in Las Vegas, WYNN likes to position its resorts as the most expensive in the city.[3] In 2010, the company earned $4.18 billion in revenue and $316 million in net income.
Company Overview
Business Segments[4]
- Las Vegas (31% of total revenue, 70% of assets, 57% of costs)
- Wynn Macau (69% of total revenue, 30% of assets, 43% of costs)
Business Growth[5]
Fiscal Year ended December 31, 2010
- Revenue increased to $4.18 billion from $3.05 billion in 2009.
- Net income increased to $316 million from $39.1 million in 2009.
Trends and Forces
Wynn has big exposure to the Macau gaming market
Due to the company's big investments in Macau, the company is both receptive of booms in the emerging markets and susceptible to the busts.The Macau gaming market is largely dependent on the Chinese market and economy. If the market worsens as it had in the 2008-2010 recession, Wynn Resorts could see its bottom line affected accordingly.
Wynn insists on keeping full-time staff employed
During downturns, Wynn's plan is to preserve employment includes pay cuts, reduced work weeks for its employees and suspend 401(k) matching. CEO Steve Wynn believes that eliminating job security worries amongst its employees is paramount to maintaining strong human capital, a driver of the consumer's experience at any Wynn casinos.[6]
Government Regulation and Gaming Laws
Macao's gaming laws and gaming taxes are relatively young and have few precedents, making them quite vulnerable to sudden change. China has a large and affluent middle class, but for many years travel and currency restrictions made it difficult and undesirable for visitors to come to Macao. While the Chinese government relaxed many of these restrictions when it first granted gaming licenses and ended its state-run gaming monopoly, there is no sign that this deregulation trend will continue.[7]
Competition
Wynn Resorts faces intense competition in both Las Vegas and Macau. The company’s primary competitors include Las Vegas Sands and MGM Mirage, both of which operate in the Las Vegas and Macau markets. Wynn Resorts also faces competition from privately-held Harrah’s Entertainment, Boyd Gaming, and Native American casinos.
- Las Vegas Sands: Like Wynn, LVS has properties in Las Vegas, Macau, Bethlehem in Pennsylvania and Singapore.[8]
- MGM Mirage: Operates casino resorts, golf courses, and golf clubs in the United States. MGM has a strategic alliance with the Mashantucket Pequot Tribal Nation, owner of Foxwoods Casino Resort in Ledyard, Connecticut.
- Boyd Gaming: Owns and operates casinos in Nevada, Illinois, Louisiana, Mississippi, Indiana, and New Jersey in addition to pari-mutuel jai alai facility in Florida, two travel agencies, and an insurance company.
- Harrah's Entertainment: A gaming company that owns and operates under the Harrah's, Caesars and Horseshoe brand names.[9] It also owns the London Clubs International family of casinos and the World Series of Poker.
References
- ↑ Wikinvest SEC Filings: 2010 10-K WYNN, Page 3
- ↑ John Dobosz (February 26, 2009). Going All In For Wynn. Forbes.
- ↑ Oskar Garcia (February 20, 2009). Wynn Resorts to post 4Q earnings on Tuesday. Forbes.
- ↑ Wikinvest SEC Files: 2010 10-K WYNN, Page 102-103
- ↑ Wikinvest SEC Files: 2010 10-K WYNN, Item 6: Selected Financial Data
- ↑ Wynn Resorts Ltd. Q3 2008 Earnings Call Transcript. Seeking Alpha (October 30, 2008).
- ↑ MacauCasinoWorld.com: History.
- ↑ Wikinvest: Las Vegas Sands
- ↑ Corporate Profile. Harrah's Entertainment.
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